This blog is written in response to Gideon Gartner's blog "Advisory Industry, a future redesign: the “Payment” Model". As I called out in two blogs in 2007 Gartner is now a small fish in a big pond as it attempts to compete in the larger management consulting market.

As such neither it nor Forrester or IDC can achieve organic growth and catapult themselves into the 10’s of billions of dollars of revenues (and higher profit margins) that the wider industry commands. For that reason I completely agree with Gideon that the required changes to existing pricing models in the ICT analyst advisory market are unrealistic in today’s environment. However, the “king of change” as Gideon called it in one response is well within reach of the firms that stand capable of changing and re-educating the industry.

I believe that the future of the large ICT analyst houses is inextricably tied to the innumerable boutiques that exist in every market that is geographically and economically relevant to the ICT industry. To maintain relevance as the global benchmarks, Gartner and Forrester must follow the lead of major banks and airlines and address a different business model that will include the addition of lower cost subsidiaries that offer either changes in service, pricing and delivery structures to companies that represent a larger and more diverse demogrpahics. Let me elaborate.

Downturns are always interesting times for the analyst industry. I’ve lived through a couple but always as staff. Layoffs always happen, as we have seen with Gartner and Forrester culling 2-3% of their respective global research headcount over the last month. Australia hasn't been immune. Management changes will occur as well as the usual chop and change of resources between companies. Further consolidation is inevitable.  

What makes this recession interesting is that it is the first since 2005 when the last big spike in new analyst firms (like us) popped up on the radar. Times have been pretty good since then. However as a business owner I am glad that we started almost four years ago and not in the last 12-months. 

Since those times we have made it abundantly clear to most organisations we talk to that a stretch end-game for us is IPO. We want to be the recognised Australian analyst brand. To get there our challenges are not just internal because the industry itself has changed dramatically in the eyes of the customer and analyst relations alike. 

In my wrap-up I described it as a mix of the television show Thank God You’re Here and what I can only imagine must be the sheer terror of a first Alcoholics Anonymous meeting. Over the course of two-days I had to pretend to be 2-inches tall, Marlon Brando, Irish, and a Whisperer. Then there were the prone breathing exercises, video taped introductions in front of complete strangers and of course what I was there for, the corporate presentation. I am of course talking about the NIDA corporate performance course that myself, Kris and Sam all participated in last week. But why did we do it?

In 2006 I approached my wife with a proposition that went something like this. “I want to quit my well paying job.” When that met with silence I bravely continued. “I would like to start a company”. Still silence. “And I would like you and the kids to give me four years to screw-up.” While I wasn't entirely sure of what her reaction would be I was pretty confident that  a high level of trust existed in our relationship. But it wasn't as if we had ever sat down and measured it. So for those interested in taking a short self-assessment to find out exactly how trustworthy you are then visit Charles Green's Trust Quotient (Charles co-authored The Trusted Advisor with David Maister and Robert Galford). For those interested in what my wife said, read on...

In February 2005 I stood on the shores of the Persian Gulf and threw a proverbial message in a bottle towards the Iranian shore. Three years and two months later it washed up on a reach of the Potomac River in Sterling, Virginia. In the ensuing days I made a new business associate and rekindled an old friendship.